Strong end-user demand boosts property industry
Publicly listed property developer Century Properties Group Inc. said that the strong and sustained sales of its condominium units over the last two years are indicative of a continuously resilient real estate market, fueled largely by legitimate end-user demand.
"This is one of the strengths of the Philippine property industry. The demand is driven by our 11-million strong Filipino expatriates, coupled by a growing local market with increased purchasing power because of favorable economic conditions," said Century co-Chief Operating Officer and Managing Director Marco Antonio.
He added that while other countries are experiencing a property glut, the Philippine property market will remain healthy.
"Residential unit purchases here are non-speculative because majority of the buyers are end-users. Compared to other Asian countries like Singapore or Taiwan, the Philippines still has low homeownership rates, hence the real demand," Antonio said.
For 2011, the company reported a 53-percent increase in sales to P4.70 billion from P3.07 billion in 2010, which represents 54 percent of Century's P20 billion in 2012 full year pre-sales target, hence its continued bullish outlook on the property industry.
"Our sales mostly come from Filipinos working overseas-the main drivers of our growing middle class. Majority of them are first-time homebuyers. Those who migrated to other countries, on the other hand, save up to buy homes for their families in the Philippines, while others get a condo unit in the city to have vacation homes when they come for a visit," Antonio said.
The Philippines' economic growth is also spurring residential property demand from the local market.
"More Filipinos are experiencing financial independence and they are more attracted to the proposition of paying for an amortization of P6,000 to P12,000 a month, rather than spending the same amount to rent out a place," Antonio pointed out.
In the Philippines where most residential projects are offered at lower pre-selling prices, the standard down payment of 20 to 30 percent of a property's total contract price can be stretched over the construction period.
"The balance upon turnover can be settled through a housing loan, which is still affordable as the banking industry's interest rates remain at their lowest at 5 [percent] to 8 percent, and loan takeouts can be payable over a period of 20 years." Century added.
The overall optimism in the Philippines is also attracting foreign nationals and investors to its property market.
Century said that it is getting non-Filipino buyers from the rest of Asia especially for its high-end properties, such as the Trump Tower at Century City, the Versace Home-interior designed Milano Residences, the Missoni Home interior designed Acqua Livingstone, and even the man-made beach residential community called Azure, which has a beach club designed by Paris Hilton.
Century Properties said that it also welcomes the additional safety measures of the Bangko Sentral Ng Pilipinas as it works to protect the property industry against a bubble.
"It makes the market even stronger as it ensures that real estate loans are given to worthwhile projects and weeds out speculators." Antonio said.
Source: Manila Times | September 11, 2012
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